Good Dogs & Rogues June 13-July 12 From Dogcatcher Readers

June 13-July 12, Fredrik Arnold article readers mentioned 42 equities & funds in their comments. Some lamented bad news so bad news investments mixed in with (mostly) favorites.

By YIELD, the following ReFa/Ro made the top ten: ET; PFN; BSM; CHS; ECC; GPP; SEMG; EDF; SMHB; MMLP. They averaged 13.99% yields. (Five made all-three lists: MMLP; ET; BSM; SEMG; GPP).

$5k invested in the lowest-priced five of ten top yield June ReFa/Ro showed 7.01% LESS net gain than from the same investment in all ten. Big high-priced ReFa/Ro mentioned stocks topped the pack.

Since May 2017, any dividend-paying stock mentioned in a message, e-mail or comment to the author is fair game for a reader favorite listing in this series of articles. Thus, It is possible that only rogues and discontinued, or dreadful, doubtful dividend issues may appear.

Lately readers and other contributors have questioned the intent, purpose, validity, and usefulness of my daily stock lists. Most, however praise the effort to sort promising opportunities out of the thousands of dividend offers. After all, yield counts when searching for dividend winners.

Most valuable to the writer, however, are those reader comments that truly catch errors in my calculations or changes in direction. Examples like the reader who misses my "safer" dividend follow-up articles because they contain dividend payout ratios.

This month the goofs were my inclusion of CNSL in a high yield list after they had announced a cancellation of dividends in April, and my failure to detect GME's dividend death in June. Readers last month noted Q Pay JMP among my MoPay list from YCharts.

My gaff confusing volatility with risk in my beta reports was detected in May. Others called out blunders missing the dividend cut by Unity and botching HD's price in March; crediting ATVI with 4x its annual dividend in February; claiming DF.TO a monthly pay when it only paid four dividends last year; AVH on the January MoPay list when it stopped paying dividends in September; non-dividend paying Trez Capital (TZS.TO) and Canadian Life (LFE.TO) stocks in January; showing Chevron as both a low price and higher price stock in the Aristocrats in November, and giving General Mills the GM ticker symbol in a previous month, come to mind.

Y Charts responded with the following information when I complained about cancelled dividends remaining alive and listed for a full year after their demise: "We allow a dividend yield to persist for 365 days after the most recent reported dividend if a dividend is cut. Hence, this data should not be used for backtesting purposes. For true historical testing purposes, one would need the date the company announced a cut or increase in the dividend to get the proper expected dividend yield as of a given date."

Below are 42 tangible results for the reader favorite & rogue equities and funds mentioned between June 13 and July 12. Two non-dividend payers made the list, BRK.B & RHT, along with two Closed-End Investment Companies, EDF, PFN, and one ETN, SMHB.

Five reader-favorite top yield stocks were verified as being among the top 10 gainers for the coming year based on analyst one-year target prices. (They are tinted gray in the chart below). Thus, this yield-based forecast for the reader-fave stocks, as graded by Wall St. wizards, was 50% accurate.

The following probable profit-generating trades were identified by projections based on estimated dividend returns from $1k invested in each of the highest yielding stocks. That dividend and the median of aggregate one-year analyst target prices, as reported by YCharts, created the 2019-20 data points.

Note: one-year target prices by lone analysts were applied in two cases this month. Ten probable profit-generating trades projected to July 12, 2020 were:

WPP PLC (WPP) was projected to net $638.87, based on a median of target price estimates from two analysts, plus the projected annual dividend, less broker fees. The Beta number showed this estimate subject to risks 6% more than the market as a whole.

Martin Midstream Partners LP (MMLP) netted $510.48 based on the median target price estimate from five analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risks 10% over the market as a whole.

Energy Transfer LP (ET) was projected to net $509.55, based on the median of target estimates from nineteen analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risks 56% over the market as a whole..

British American Tobacco (BTI) was projected to net $442.09 based on the median of target price estimates from five analysts plus dividends, less broker fees. The Beta number showed this estimate subject to risks 14% under the market as a whole.

Black Stone Minerals LP (BSM) was projected to net $422.82, based on dividends, plus a median of target price estimates from six brokers. The Beta number showed this estimate subject to risk 43% under the market as a whole.

Semgroup Corp (SEMG) was projected to net $367.69, based on ten target price estimate from eight analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk 45% over the market as a whole.

Kohl's Corp (KSS) was projected to net $338.37, based on target price estimates from twenty analysts, plus annual dividends, less broker fees. The Beta number showed this estimate subject to risks 2% less than the market as a whole.

Green Plains Partners LP (GPP) was projected to net $318.16, based on dividends plus a median target price estimate from three analysts, less broker fees. The Beta number showed this estimate subject to risks 95% under the market as a whole.

AbbVie Inc (ABBV) was projected to net $288.81, based on a target price estimate from twelve analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risks 2% less than the market as a whole.

UMH Properties Inc (UMH) netted $215.34 based on dividends plus the median of target price estimates from four analysts less broker fees. The Beta number showed this estimate subject to risks 37% less than the market as a whole.

Average net gain in dividend and price was estimated at 40.52% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risks 8% under the market as a whole.

The probable losing trade revealed by one analyst in YCharts was:

TC Energy Corp (TRP) projected a loss of $33.10 based on dividend and a projected target price estimate from one analyst, including $10 of broker fees. The Beta number showed this estimate subject to risk 20% more than the market as a whole.

The "dog" moniker was earned by stocks exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. So, the highest yielding stocks in any collection have become affectionately known as "dogs." More precisely, these are, in fact, best called, "underdogs."

Yield (dividend/price) results from YCharts.com verified by Yahoo Finance for FoFa/Ro stocks as of market closing prices 7/12/19 for 42 equities and funds revealed the actionable conclusions discussed below.

See any Dow 30 article for an explanation of the term "dogs" for stocks reported based on Michael B. O'Higgins book "Beating The Dow" (HarperCollins, 1991), now named Dogs of the Dow. O'Higgins' system works to find bargains in any collection of dividend paying stocks. Utilizing analysts' price upside estimates expanded the stock universe to include popular growth equities, as desired.

ReFa/Ro sorted by yield calculated as of market close 7/12/19 represented 10 of 11 Morningstar sectors as well as two CEICs and one ETN among 42 selections.

Of the leading ten by yield, the top reader-mention was the first of five energy firms which placed first, fourth, fifth, eighth and tenth: Martin Midstream Partners LP (MMLP) [1], Semgroup Corp (SEMG) [4]; Green Plains Partners LP (PP) [5]; Black Stone Minerals LP (BSM) [8]; Energy Transfer LP (ET) [10].

The second reader-mentioned finisher by yield was the ETN, ETRACS 2xMnthly Py Lvrgd US SmCpHiDivETN (SMHB) [2]. Two CEICs (or closed end investment corporations) placed third and ninth, Stone Harbor Emerging Mkts Income (EDF) [3], and PIMCO Income Strategy Fund II (PFN) [9].

Then two industrial sector representatives placed third and ninth, LSC Communications Inc (LKSD) [3] , and Quad/Graphics Inc (QUAD) [9]. Thereafter, a Basic Material firm placed fourth, SunCoke Energy Partners LP (SXCP) [4].

A single financial services entity, placed sixth, Eagle Point Credit Co LLC (ECC) [6].

Finally, a single consumer cyclical firm placed seventh, Chico's FAS Inc (CHS) [7]], to complete the top 10 ReFa/Ro by yield for July.

To quantify top dog rankings, analysts' median price target estimates provided a "market sentiment" gauge of upside potential. Added to the simple high-yield metrics, analysts' median price target estimates became another tool to dig out bargains.

10 top ReFa/Ro were culled by yield for their monthly update. Yield (dividend/price) results verified by YCharts did the ranking.

As noted above, top 10 ReFa/Ro selected 7/12/19 showing the highest dividend yields represented: energy (5); financial services (4); consumer cyclical (1).

$5k invested as $1k in each of the five lowest-priced stocks in the top 10 ReFa/Ro kennel by yield were predicted by analyst one-year targets to deliver 7.01% LESS net gain than $5k invested in all 10. The second lowest priced ReFa/Ro top yield equity, Martin Midstream Partners LP (MMLP), was projected to deliver the best net gain of 51.05%.

The five lowest-priced ReFa/Ro top yield dogs for July 12 were: Chico's FAS Inc (CHS); Martin Midstream Partners LP (MMLP); PIMCO Income Strategy Fund II (PFN); Semgroup Corp (SEMG); Stone Harbor Emerging Mkts Income (EDF), with prices ranging from $3.48 to $14.07 per share.

Five higher-priced ReFa/Ro for July 12 were: Green Plains Partners LP (GPP), Energy Transfer LP (ET), Black Stone Minerals LP (BSM), ETRACS 2xMnthly Py Lvrgd US SmCpHiDivETN (SMHB), and Eagle Point Credit Co LLC (ECC) whose prices ranged from $14.23 to $18.63.

The distinction between five low-priced dividend dogs and the general field of 10 reflected Michael B. O'Higgins' "basic method" for beating the Dow. The scale of projected gains based on analysts' targets added a unique element of "market sentiment" gauging upside potential.

It provided a here-and-now equivalent of waiting a year to find out what might happen in the market. Caution is advised, since analysts are historically only 20% to 80% accurate on the direction of change and just 0% to 20% accurate on the degree of change.

The 42 equities and funds discussed in this article were submitted wthin comments from Seeking Alpha members, nicknamed: a000962; betterluckythansmart; bill.reist.com; Billbo99; birder; cssys; cvappone; DivGrowthInvestor; EliasMouawad; hkzk0816; JAB7651; labman106; LazyGringo; lk200; Long Time Running; Michael Lennon1030; Nancy Kramer; OldEurope; PJ is SA; RoseNose; SayItWithLyrics; smurf.

The net gain/loss estimates above did not factor in any foreign or domestic tax problems resulting from distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.

Stocks listed above were suggested only as possible reference points for your FoFave dog stock purchase or sale research process. These were not recommendations.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.

Graphs and charts were compiled by Rydlun & Co., LLC from data derived from www.indexarb.com; Dogs photo: tomswallpapers.com

Disclosure: I am/we are long CSCO, T. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Seekingalpha.com

Powered by NewsAPI.org

Keywords:

Stock • Party of New Forces (Belgium) • 1017 Records • Forward error correction • EDF Energy • The Marshall Mathers LP • The Marshall Mathers LP • 1017 Records • Dividend • Email • Fair Game (2010 film) • Dividend • Dividend • Division (mathematics) • Division (mathematics) • Division (mathematics) • Generic Modeling Environment • Dividend • JMP (statistical software) • Mopay • Volatility (finance) • Dividend • Dividend • Alexander von Humboldt German International School Montreal • Mopay • Dividend • Tanzanian shilling • Canada • LFE (programming language) • Stock • Chevron Corporation • Stock • General Mills • General Motors • Ticker symbol • Dividend yield • Backtesting • Dividend yield • Stock • Closed-end fund • EDF Energy • Party of New Forces (Belgium) • Exchange-traded note • Target costing • Probability • Profit (economics) • Dividend • Rate of return • Stock • Dividend • Median • Aggregate demand • Target costing • Target costing • WPP plc • Dividend • Beta (finance) • Risk • Market (economics) • Limited partnership • The Marshall Mathers LP • Dividend • Broker • Fee • Beta (finance) • Risk • Market (economics) • Energy • Limited partnership • Internet • Dividend • Beta (finance) • Risk • Market (economics) • British American Tobacco • Dividend • Broker • Beta (finance) • Risk • Market (economics) • Black Stone Minerals • Limited partnership • 1017 Records • Dividend • Beta (finance) • Market (economics) • SemGroup • Dividend • Broker • Beta (finance) • Market (economics) • Kohl's • Tibetan alphabet • Dividend • Beta (finance) • Risk • Market (economics) • Limited partnership • Internet • Dividend • Broker • Beta (finance) • Risk • Market (economics) • AbbVie Inc. • Dividend • Broker • Beta (finance) • Risk • Market (economics) • Miguel Hernández University of Elche • Property • Corporation • Miguel Hernández University of Elche • Dividend • Median • Broker • Beta (finance) • Risk • Market (economics) • Dividend • Price • Stock • Risk • Market (economics) • Holism • Probability • Trade • Energy • Dividend • Stockbroker • Market (economics) • Stock • Dividend • Stock • Dividend • Price • Yahoo! Finance • Stock • Financial market • Stock • Lawsuit • Dow Jones Industrial Average • Stock • O'Higgins F.C. • Dogs of the Dow • O'Higgins F.C. • Dividend • Stock • Price • Stock • Economic growth • Stock • Yield (finance) • Market (economics) • Exchange-traded note • Midstream • Limited partnership • The Marshall Mathers LP • SemGroup • Black Stone Minerals • Physics beyond the Standard Model • Exchange-traded note • Investment • Corporation • Stone Harbor, New Jersey • Income • Électricité de France • PIMCO • Party of New Forces (Belgium) • Industry • Quad/Graphics • Corporation • Partnership • Limited partnership • Financial services • Legal personality • Eagle Point, Oregon • Credit (finance) • Company • Limited liability company • Error detection and correction • Consumer • Chico's (clothing retailer) • Top Dog (comics) • Market sentiment • Norm (mathematics) • Mathematical analysis • Median • Price • Dividend • Price • Dividend • Yield (finance) • Financial services • Consumer • Business cycle • Stock • The Marshall Mathers LP • Chico's (clothing retailer) • Limited partnership • The Marshall Mathers LP • PIMCO • Party of New Forces (Belgium) • SemGroup • Stone Harbor, New Jersey • Électricité de France • Black Stone Minerals • Limited partnership • Business service management • Eagle Point, Oregon • Error detection and correction • Dividend • Bernardo O'Higgins • Market sentiment • Stock • Seeking Alpha • Birdwatching • The Smurfs • Probability distribution • Tax advisor • Dividend • Investment • Stock • Stock • Sales • Research • Negotiable instrument • Security (finance) • Price • Rate of return • Stock • Consideration • Fee • Contract • Tax • Interest • Company • Limited liability company • Data • Corporation • Cisco Systems • Seeking Alpha • Stock market •